SB 233 revises Kentucky law governing financial reporting and recordkeeping for property owner associations, including both planned community associations and condominium associations. The bill requires associations to maintain financial records detailed enough to support financial statements prepared under generally accepted accounting principles, and it sets deadlines for preparing annual financial reports and making them available to owners electronically or in paper form for a reasonable fee.
The bill also creates tiered reporting requirements based on annual revenue. For planned community associations, the required report ranges from a cash-receipts statement for smaller associations to compilation, review, or audit-level reports for larger associations, with the highest standard applying at $1 million or more in annual revenue. For condominium associations, similar tiered requirements apply at lower revenue thresholds, culminating in an audit for associations with $500,000 or more in annual revenue. In both cases, smaller associations with 14 or fewer lots/units are exempt unless they voluntarily adopt the standards in their governing documents.
Impact
SB 233 would amend KRS 381.794 and KRS 381.9197, expanding and standardizing financial disclosure obligations for property owner associations in Kentucky. It would affect planned community associations and condominium associations by imposing specific accounting standards, reporting deadlines, owner access rights to financial records, and fee rules for copies of reports. The bill would also preserve flexibility by allowing associations to choose a higher level of reporting than required and by exempting very small associations unless they opt in.
Sentiment
The available voting history suggests strong support for the bill, with the Kentucky Senate passing it 33-0 on third reading. No committee transcript is available, so there is no recorded floor or committee debate to indicate organized opposition or detailed concerns. Overall, the bill appears to have been received favorably as a transparency and accountability measure for association finances.
Contention
The main potential points of contention are the cost and administrative burden of the new reporting requirements, especially for smaller associations that may need to hire accountants or CPAs to meet the higher standards tied to revenue thresholds. Another possible issue is the balance between owner access to financial information and the association’s ability to charge a reasonable fee for paper copies. The bill addresses some of these concerns by exempting associations with 14 or fewer lots or units and by allowing voluntary adoption of the standards, but no recorded discussion is available showing specific supporters or critics.